Blockchain data showed stablecoin issuer Paxos both minted and burned 300 trillion tokens of the PayPal USD stablecoin within 30 minutes, leaving many crypto users scratching their heads.
In a Wednesday X post following the mint and burn, Chaos Labs founder Omer Goldberg said Aave would be temporarily freezing trades for PayPal USD (PYUSD) after an “unexpected high-magnitude transaction” of minting and burning the stablecoin. Ethereum blockchain data showed Paxos minting 300 trillion of the US dollar-pegged stablecoin at 7:12 pm UTC and then burning the entire amount 22 minutes later by sending it to an inaccessible wallet.
PYUSD, pegged 1:1 to the US dollar, makes the supply of the burned coins worth about $300 trillion. The stablecoin has a market capitalization of more than $2.3 billion at this writing, making it the sixth-largest coin behind Tether’s USDt (USDT), USDC (USDC), Ethena USDe (USDE), Dai (DAI) and World Liberty Financial USD (USD1).
In a Wednesday X post, Paxos said it had “mistakenly minted excess PYUSD as part of an internal transfer.”
“This was an internal technical error,” said Paxos. “There is no security breach. Customer funds are safe. We have addressed the root cause.”
PYUSD maintained its dollar peg following the news, but its price briefly dropped by about 0.5%, according to data from Nansen.
$300 trillion is more than twice the Gross Domestic Product for every country on earth, according to data from the International Monetary Fund.
This is a developing story, and further information will be added as it becomes available.
